No tax concession for political parties, clarifies FM Arun Jaitley

Mumbai: The government has made absolutely no concession in the way tax authorities deal with political parties, and they will be treated the same way as other offenders if they violate the law, Finance Minister Arun Jaitley said during the ET Awards ceremony.

“Whatever was the existing system, which has existed for the last 15 years, is continuing and if somebody creates a political party for the purposes of channelising funds, obviously the law will step in,” Jaitley said at a panel discussion before an audience of India’s biggest business leaders, bankers and CEOs.

“Hopefully, for the future, political funding will have to be more transparent,” he added.

Jaitley also said the economy had a lot to gain from digitisation of payments and the withdrawal of high-value bank notes. In this he was strongly supported by Power, Coal, Renewable Energy Minister Piyush Goyal, Railway Minister Suresh Prabhu and Road Transport and Highways Minister Nitin Gadkari.

Goyal said demonitisation had triggered a big change in the mindset of Indians. “People realise that it doesn’t pay to be dishonest,” he said.

He said demonitisation and the change in mindset that it was bringing, was changing the way people did business and also had a positive impact on revenue collection by state power distribution companies.

The minister said he had interacted extensively with the trading community, but in his interaction he had received positive feedback from the younger generation. He said the younger generation is is pleased that the country’s new environment brought in a level playing field.

The shortage of new currency notes has disrupted many sections of the Indian economy, particularly those in the informal economy where deals are struck primarily in currency notes. Prabhu said a digital revolution was round the corner, but such events do not occur without any disruption.

He said demonitisation was part of a larger strategy of a digital revolution, for which a small price had to be paid in the interest of bigger rewards ahead.

“Let us look at little larger picture. We are the largest economy till the first industrial revolution, then came the second one, took us even behind, the third one we missed out. The fourth revolution is going to be the digital revolution and if we can actually embrace it, can ride it and not just see it passing by, we could be the real winners,” he said.

Opposition parties have staunchly opposed the government’s move, arguing that the common man had been hit, but Prabhu said rival political parties can play a more constructive role. Prabhu said the opposition parties will oppose, but they can also propose, and the government prefers the latter.

Gadkari, who has turned around the highways sector and won the ET Award in the business reformer category, said the government was in a strong position to deal with demonitisation.

The minister said he was optimistic about infrastructure projects and the funding available to them. He also made a strong pitch for effective decision making by officials. He emphasised the need for fast-track decisions by the administration.

He said officials should take a decision whether they approve or disapprove a proposal, but they should not delay matter. Gadkari said action should be taken against those in the system who delay decision making.